ACC 2203 HW 1 SOLUTIONS
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10/5/12 11:41 AM
Page 1 of 6
Assignment Print View
1.
10/5/12 11:41 AM
award:
10.00 points Classify each cost as either variable or fixed with respect to the number of units produced and sold. Also indicate whether each cost would typically be treated as a direct cost or an indirect cost with respect to units of product.
Cost Behavior
Variable
Fixed
Cost Item
To Units of Product
Direct
Indirect
1.Electricity to run production equipment.
Yes
No
No
Yes
2.Rent on a factory building.
No
Yes
No
Yes
3.Cloth used to make drapes.
Yes
No
Yes
No
4.Production superintendent's salary.
No
Yes
No
Yes
5.Wages of laborers assembling a product.
Yes
No
Yes
No
6.Depreciation of air purification equipment used to make furniture.
No
Yes
No
Yes
7.Janitorial salaries.
No
Yes
No
Yes
8.Peaches used in canning fruit.
Yes
No
Yes
No
9.Lubricants for production equipment.
Yes
No
No
Yes
10.Sugar used in soft-drink production.
Yes
No
Yes
No
11.Property taxes on the factory.
No
Yes
No
Yes
12.Wages of workers painting a product.
Yes
No
Yes
No
13.Depreciation on cafeteria equipment.
No
Yes
No
Yes
14.Insurance on a building used in producing helicopters.
No
Yes
No
Yes
15.Cost of rotor blades used in producing helicopters.
Yes
No
Yes
No
Worksheet
Learning Objective: 01-06 Understand the differences between variable costs and fixed costs.
Difficulty: Easy
Learning Objective: 01-07 Understand the differences between direct and indirect costs.
http://ezto.mhecloud.mcgraw-hill.com/hm_accounting.tpx
Page 2 of 6
Assignment Print View
2.
10/5/12 11:41 AM
award:
10.00 points Swift Company was organized on March 1 of the current year. After five months of start-up losses, management had expected to earn a profit during August. Management was disappointed, however, when the income statement for August also showed a loss. August's income
http://ezto.mhecloud.mcgraw-hill.com/hm_accounting.tpx
10/5/12 11:41 AM
Page 1 of 6
Assignment Print View
1.
10/5/12 11:41 AM
award:
10.00 points Classify each cost as either variable or fixed with respect to the number of units produced and sold. Also indicate whether each cost would typically be treated as a direct cost or an indirect cost with respect to units of product.
Cost Behavior
Variable
Fixed
Cost Item
To Units of Product
Direct
Indirect
1.Electricity to run production equipment.
Yes
No
No
Yes
2.Rent on a factory building.
No
Yes
No
Yes
3.Cloth used to make drapes.
Yes
No
Yes
No
4.Production superintendent's salary.
No
Yes
No
Yes
5.Wages of laborers assembling a product.
Yes
No
Yes
No
6.Depreciation of air purification equipment used to make furniture.
No
Yes
No
Yes
7.Janitorial salaries.
No
Yes
No
Yes
8.Peaches used in canning fruit.
Yes
No
Yes
No
9.Lubricants for production equipment.
Yes
No
No
Yes
10.Sugar used in soft-drink production.
Yes
No
Yes
No
11.Property taxes on the factory.
No
Yes
No
Yes
12.Wages of workers painting a product.
Yes
No
Yes
No
13.Depreciation on cafeteria equipment.
No
Yes
No
Yes
14.Insurance on a building used in producing helicopters.
No
Yes
No
Yes
15.Cost of rotor blades used in producing helicopters.
Yes
No
Yes
No
Worksheet
Learning Objective: 01-06 Understand the differences between variable costs and fixed costs.
Difficulty: Easy
Learning Objective: 01-07 Understand the differences between direct and indirect costs.
http://ezto.mhecloud.mcgraw-hill.com/hm_accounting.tpx
Page 2 of 6
Assignment Print View
2.
10/5/12 11:41 AM
award:
10.00 points Swift Company was organized on March 1 of the current year. After five months of start-up losses, management had expected to earn a profit during August. Management was disappointed, however, when the income statement for August also showed a loss. August's income